Theresa May has issued a stark warning to her critics on the continent not to use Brexit talks to score “political points” against the UK, as she made it clear she would rather walk away empty-handed than accept a “punitive” deal.

In her first major speech on Brexit, the Prime Minister confirmed her intention to withdraw from the Single Market and the jurisdiction of European courts in order to pursue an “ambitious” new agreement with the 27-strong trading bloc.

However, in a clear threat to her fellow EU leaders, she stressed that “no deal” for Britain was “better than a bad deal” – suggesting she is willing to crash out of the union rather than compromise on issues like free movement and regulation.

A confident Mrs May claimed this would amount to such a “calamitous” act of “self-harm” on the part of Europe that a favourable deal was in both parties’ interests – with minimal tariffs and a new customs agreement topping her list of demands.

“Britain wants to remain a good friend and neighbour to Europe. Yet I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path,” Mrs May said.

“That would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend.

“Britain would not – indeed we could not – accept such an approach.

Prime Minister Theresa outlines her plans for Brexit, saying that she does not want an outcome which leaves the UK 'half in, half out' of the EU

“And while I am confident that this scenario need never arise... I am equally clear that no deal for Britain is better than a bad deal for Britain.”

Today’s address, delivered to an audience of senior ministers and European diplomats in London, was widely held to have delivered a much more comprehensive strategy than many of the Prime Minister’s opponents had anticipated.

In addition to spelling out plans for leaving the Single Market and increasing control of EU migration, it also included a commitment to giving Parliament a vote on the final agreement with the EU.

This helped to silence some of Mrs May’s most prominent critics from within her own party, with Eurosceptic Peter Bone describing the speech as “splendid” and remain campaigner Anna Soubry welcoming the “much-needed clarity”.

Prime Minister Theresa May speaking at Lancaster House in London where she outlined her plans for Brexit

However, the confirmation of a so-called hard Brexit sparked concern among Labour and Lib Dem MPs, with Shadow Brexit Secretary Keir Starmer expressing concern about the Prime Minister’s allusions to a new economic model.

He said: “That model – a shared model on which there has been consensus for decades across this House –is designed to share prosperity, protect workers’ rights and improve living standards.

“There is no mandate for reckless disregard of that model... It would be an act of huge self-harm for the UK to abandon the economic model that we have had in place for so many years.”

There was also some uncertainty about what would happen in the event that Parliament rejects the final exit deal. Questions were raised about whether this would see officials return to the negotiating table, or see a default return to World Trade rules.

The Prime Minister’s “blunt” criticism of the EU’s inflexible approach to negotiations sparked a backlash from European leaders, as they suggested the UK was being overambitious with its demands.

Many European figureheads also spoke of their sadness and disappointment that Britain had opted for a “hard” Brexit, with EU council president Donald Tusk describing it as “surreal”.

Prime Minister Theresa May leaving Downing Street in London, ahead of her speech on Brexit.

Responding to the speech, EU chief negotiator, Guy Verhofstadt argued that any new deal secured by the UK will be worse than its current arrangement. He added that Mrs May was mistaken to suggest that Britain “can go out of the single market... go out of the customs union and cherry-pick” its favourite features.

Meanwhile, the Czech Europe Minister, Tomas Prouza,suggested the plan was “a bit ambitious”, asking: “Where is the give for all the take?”

And Sweden’s former Foreign Minister Carl Bildt tweeted: “I regret the approach the UK Government has taken... I think most of the EU would have preferred a closer relationship.”